As part of the sweeping fat pipe pact, the companies said they would also work together with CE manufacturers to promote the development of broadband digital appliances featuring "new functions."

"Retail will be important, not only as a distribution channel, but also as a source of information that will help us work with consumer electronics manufacturers on innovative products for the future," said Doug Seserman, senior VP/marketing for AT&T Broadband. "Ultimately, we envision a wide range of consumer electronics devices available for purchase at retail that will operate on AT&T Broadband's network."

Seserman noted that AT&T had spent the past year evaluating how best to sell its services via the retail channel. "The alliance with Best Buy," added Dan Hillen, the group's VP/sales and distribution, "makes it easier to shop for broadband products and services by giving consumers an opportunity to see how the services actually work."

Phil Schoonover, Best Buy's senior VP/digital technology solutions, called the telecommunications giant "a respected and well-known brand," and said the pact will help the retailer expand its "offerings in connections and content."

The partners, who signed a letter of intent, said they also plan to develop joint "e-commerce strategies, operational systems and synergies, and future business development opportunities."

The interactive kiosks will appear in Best Buy stores around the country within AT&T Broadband service areas. Services include AT&T Digital Cable, which features over 100 channels of TV programming, and cable Internet access under the AT&T@Home and AT&T Road Runner banners.